VanEck Morningstar Wide Moat Fund (MOAT)
MOAT: Possible S&P 500 Alternative
I delve deeper into the VanEck Morningstar Wide Moat ETF (MOAT ETF) and its underlying index. I present comparisons of key fund metrics to explain why MOAT ETF is a potential alternative to ETFs tracking the S&P 500. I conclude my analysis with a 'Buy' rating for MOAT ETF.
Moats and Value Can Be Potent Combination
On Wednesday, Nvidia (NVDA) became the second-most valuable company in the world and while that's just one example, it's confirmation that investors' enthusiasm for growth stocks remains high.
I Love MOAT's Index, But Not The ETF
Morningstar has developed an Economic Moat Rating to determine a company's competitive advantage based on four measures. The Wide Moat Focus Index, based on Morningstar's rating, has outperformed the S&P 500 and has a better return/risk ratio. VanEck Morningstar Wide Moat ETF seeks to replicate the index's performance, but has a lower return/risk ratio and underperforms its underlying index.
Combining Quality and Value
In the past year, investors have been rewarded by focusing on quality companies. Shares of companies with strong balance sheets and consistent earnings and cash flow have performed relatively well.
